Showing posts with label Tencent. Show all posts
Showing posts with label Tencent. Show all posts

Sunday 18 December 2022

Tencent HK

 

Fiscal year is January-December. 
All values HKD Millions.
2021 2020 2019 2018 2017 5-year trend 


INCOME STATEMENT
Sales/Revenue 675,060 541,692 427,814 370,372 274,158
 Sales Growth 24.62% 26.62% 15.51% 35.09% - 
Gross Income 290,106 244,184 188,023 165,629 134,825
 Gross Income Growth 18.81% 29.87% 13.52% 22.85% -
 Gross Profit Margin 42.97%
 Non Operating Income/Expense 153,763 32,819 14,303 5,642 21,664
 Non-Operating Interest Income 8,015 7,818 7,160 5,412 4,543
 Interest Expense 9,543 8,370 8,720 5,801 3,528
 Pretax Income 318,786 198,163 125,957 110,129 100,773
 Pretax Income Growth 60.87% 57.33% 14.37% 9.28% -
 Pretax Margin 47.22%
 Net Income 270,958 179,619 105,806 93,239 82,457
 Net Income Growth 50.85% 69.76% 13.48% 13.08% -
 Net Margin 40.14%


CASH FLOW STATEMENT
 Net Income before Extraordinaries 274,559 179,931 108,729 94,737 83,565
 Net Income Growth 52.59% 65.49% 14.77% 13.37% -
 Funds from Operations 210,932 188,087 152,073 127,573 101,489
 Net Operating Cash Flow 212,006 218,902 169,456 133,372 128,774
 Net Operating Cash Flow Growth -3.15% 29.18% 27.06% 3.57% -
 Net Operating Cash Flow / Sales 31.41% 40.41% 39.61% 36.01% 46.97% 
 Capital Expenditures (74,922) (74,837) (64,620) (64,033) (36,903) 
Capital Expenditures Growth -0.11% -15.81% -0.92% -73.51% -
 Capital Expenditures / Sales -11.10% -13.82% -15.10% -17.29% -13.46% 
Free Cash Flow 176,691 180,618 143,641 109,987 114,813
 Free Cash Flow Growth -2.17% 25.74% 30.60% -4.20% -
 Free Cash Flow Yield 3.65% - - - -

 Cash Dividends Paid - Total (15,069) (11,618) (9,429) (8,026) (5,825)


BALANCE SHEET
 Cash & Short Term Investments 323,955 273,169 212,053 193,674 173,455 
 ST Debt & Current Portion LT Debt 29,908 21,417 40,838 46,246 24,547
 Long-Term Debt 365,789 289,770 219,258 159,821 133,798 

 Total Accounts Receivable 103,373 79,951 57,732 42,002 29,347 
Accounts Payable 133,911 111,486 90,259 84,084 60,124 

 Total Current Assets 608,915 390,692 284,087 257,286 220,557 
Total Current Liabilities 494,685 321,078 268,637 232,137 182,626
 Current Ratio 1.23 1.22 1.06 1.11 1.21
 Quick Ratio 1.23 1.21 1.05 1.11 1.21
 Cash Ratio 0.65 0.85 0.79 0.83 0.95 

 Net Property, Plant & Equipment 108,020 92,137 68,912 45,580 32,124
 Intangible Assets 232,291 207,312 144,142 64,601 48,337 
Total Assets 1,972,349 1,580,962 1,067,124 825,072 665,853
 Assets - Total - Growth 24.76% 48.15% 29.34% 23.91% -
 Asset Turnover 0.38 - - - -
 Return On Average Assets 15.25%

 Total Liabilities 899,921 658,483 520,328 418,869 333,218
 Total Liabilities / Total Assets 45.63% 41.65% 48.76% 50.77% 50.04%
 Common Equity (Total) 986,318 834,672 484,023 368,917 307,403
 Additional Paid-In Capital/Capital Surplus 82,362 57,851 39,454 31,125 26,655
 Retained Earnings 837,514 638,425 430,269 341,719 243,309
 Common Equity / Total Assets 50.01% 52.80% 45.36% 44.71% 46.17%

 Total Shareholders' Equity 986,318 834,672 484,023 368,917 307,403
 Total Shareholders' Equity / Total Assets 50.01% 52.80% 45.36% 44.71% 46.17%
 Accumulated Minority Interest 86,111 87,807 62,773 37,286 25,232
 Total Equity 1,072,428 922,479 546,796 406,203 332,635
 Liabilities & Shareholders' Equity 1,972,349 1,580,962 1,067,124 825,072 665,853


 Average Growth Rates 
Tencent Holdings Ltd. 
Past Five Years Ending 12/31/2021 (Fiscal Year) 
Revenue +29.25%
 Net Income +45.72%
 Earnings Per Share +44.57% 
Capital Spending +20.60%
 Gross Margin +55.85%
 Cash Flow +10.78% 

 KEY STOCK DATA
 P/E Ratio (TTM) 14.50(12/16/22) 
EPS (TTM) HK$21.85 
Market Cap HK$3.01 T 
Shares Outstanding 9.57 B 
Public Float 5.97 B 
Yield 0.51%(12/16/22) 
Latest Dividend HK$1.60000002(06/06/22) 
Ex-Dividend Date 05/20/22 ? 
SHORT INTEREST ()

Monday 6 July 2020

Is Tencent Stock a Buy?

Does the 800-pound gorilla of China’s tech sector still have room to climb?


Jun 8, 2020


Author Bio
Follow @@TMFSunLion


Tencent (OTC:TCEH.Y) is one of the largest tech companies in China. It owns

  • WeChat, the country's top messaging app; 
  • the world's largest game publishing business; 
  • China's second-largest cloud platform; 
  • one of the country's largest video streaming platforms; and 
  • one of its top digital payment platforms.


Tencent's stock has rallied more than 1,400% over the past decade as its gaming and advertising businesses expanded and it entered new markets. Is it finally time to take profits, or does the Chinese tech giant still have room to run?



1.  Keeping pace with shifting advertising trends

Tencent's advertising business, which generated 19% of its revenue last quarter, sells ads across

  • WeChat, 
  • the older QQ messaging platform, 
  • its mobile ad network, 
  • Tencent Video, and 
  • other apps. 


The segment's revenue rose 32% annually during the quarter as

  • e-commerce, 
  • online education, and 
  • gaming companies 
bought more ads throughout the COVID-19 crisis.

However, Tencent's ad business faces fierce competition from

  • Alibaba's (NYSE:BABA) paid product listings, 
  • online search platforms like Baidu (NASDAQ:BIDU), and 
  • Gen Z-oriented platforms like ByteDance, which owns the viral short video app TikTok (known as Douyin in China).


WeChat's ecosystem of Mini Programs, which locks users into the app, also faces competition from similar walled gardens like

  • Baidu's mobile app, 
  • Alibaba-backed AliPay, and 
  • Douyin's mini programs. 

WeChat's messaging service, which serves over 1.2 billion monthly active users, also faces competition from dating apps like Momo and Tantan.

To shore up its defenses against these rivals, Tencent needs to keep launching new apps -- which will cause its operating expenses to rise.




2.  The gaming unit is relying on overseas growth and investments

Tencent's gaming business, which generated 35% of its revenue last quarter, is still locking in gamers with hit games like

  • Honor of Kings, 
  • Peacekeeper Elite, 
  • PUBG Mobile, and 
  • League of Legends. 
Its revenue grew 31% annually during the quarter as people played more games throughout the lockdown period.


Tencent's stakes in overseas companies like

  • Fortnite publisher Epic Games, 
  • Bayonetta developer Platinum Games, 
  • Ubisoft, and 
  • Activision Blizzard 
also reduce its dependence on the Chinese market, which is hobbled by fickle censorship standards, tight playtime restrictions, and rigid licensing requirements.

That expansion also widens its moat against its top Chinese rival NetEase, which is gaining significant momentum overseas with its PUBG rival Knives Out.

Looking ahead, investors should expect Tencent's gaming unit to rely more heavily on overseas titles like Call of Duty Mobile, as well as increased investments in overseas developers and publishers.




3.  Countering Alibaba in the cloud and fintech markets

Tencent's fintech and business services unit, which accounted for 24% of its top line last quarter, generates most of its revenue from

  • Tencent Cloud, China's second-largest cloud infrastructure platform after Alibaba Cloud, and 
  • WeChat Pay, which shares a near-duopoly in the payments market with Alibaba-backed AliPay.


Revenue from this newer business rose 22% annually last quarter, but that marked a significant slowdown from its previous quarters. Tencent attributed the deceleration to fewer WeChat payments throughout the lockdowns, but it expects the business to recover later this year.

Tencent doesn't disclose its cloud profits, but it's likely unprofitable like Alibaba Cloud. Both companies will likely incur more losses in their cloud businesses, and use other profitable businesses -- like Tencent's ad and gaming units, and Alibaba's core commerce unit -- to subsidize the difference.

Therefore, the growth of the fintech and business services unit is a double-edged sword: It generates fresh revenue growth and diversifies Tencent's top line away from games and ads, but it will likely throttle its adjusted operating margin -- which declined annually from 43% to 34% last quarter.



4.   Is it the right time to buy Tencent?

Analysts expect Tencent's revenue and earnings to rise 22% and 17%, respectively, this year, as its strengths offset its weaknesses. That's a solid growth rate for a stock that trades at about 33 times forward earnings.

I own shares of Tencent, and I believe it's still one of the best long-term plays on China's growth. Tencent is also better diversified than Alibaba and Baidu, which still rely heavily on e-commerce sales and online ads, respectively.

The only near-term threat to Tencent is the legislative threat to potentially delist Chinese stocks from U.S. exchanges if they don't follow certain accounting rules. But top tech companies like Tencent, Alibaba, and Baidu will more likely reach a compromise with U.S. regulators instead of staging a full retreat to closer exchanges like Hong Kong. Therefore, Tencent remains a solid long-term investment, and it has room to run after its 30% rally over the past 12 months


https://www.fool.com/investing/2020/06/08/is-tencent-stock-a-buy.aspx